WED 28 OCT 2020

Top Stories:

SCC: 9M20 net income trails forecast (AS OF OCT 27, 2020)

CEB: CEB divests, buy out stakes in SIAEC tieups INDICES

PCOR: Closure of PCOR refinery possible Close Points % YTD%

PSEi 6,415.08 -76.11 -1.17 -17.92
All Shares 3,818.11 -41.25 -1.07 -17.88
Financials 1,252.35 -17.18 -1.35 -32.80
Other News: Holding Firms 6,636.72 -93.99 -1.40 -12.58
Industrial 8,529.77 -80.26 -0.93 -11.47
7,646.90 -46.37 -0.60 -5.50
Economy: Duterte extends GCQ for Metro Manila until November 30 Mining & Oil
Property 3,103.69 -39.37 -1.25 -25.29
Economy: House transmits 2021 budget bill to the Senate Services 1,471.52 -1.16 -0.08 -3.89

Dow Jones 27,685.38 -650 -2.29 -2.99

COVID-19 Update: S&P 500

Nasdaq
3,400.97 -64.42
11,358.94 -189.34
-1.86
-1.64
5.27
26.60

Total Cases Total Deaths Total Recoveries

INDEX GAINERS
Philippines 373,144 (+1,524) 7,053 (+14) 328,602 (+353) Ticker Company Price %
GLO Globe Telecom Inc 2050.00 0.79
USA 9,034,099 (+74,065) 232,014 (+981) 5,872,917 (+50,469) ICT Int'l Container Term 117.00 0.60
BPI Bank of the Phil Islands 74.95 0.47
Worldwide 44,221,788 (+454,007) 1,171,148 (+6,924) 32,429,336 (+267,403) BLOOM Bloomberry Resorts 7.50 0.27
TEL PLDT Inc 1362.00 0.15

Market Summary: INDEX LOSERS

Ticker Company Price %
LTG LT Group Inc 12.02 -4.60
The local equities market closed lower on Tuesday as more investors took profits following BDO BDO Unibank Inc 91.90 -3.52
the rally last week. DMC DMCI Hldgs Inc 4.55 -3.19
PGOLD Puregold Price Club 42.40 -3.09
AEV Aboitiz Equity Ventures 45.80 -2.45
The PSEi dropped 76.11 points or 1.17% to end at 6,415.08 The main drags were LTG
(-4.60%), BDO (-3.52%), DMC (-3.19%), PGOLD (-3.09%), and AEV (-2.45%). On the other
hand, The top movers were GLO (+0.79%), ICT (+0.60%), BPI (+0.47%), BLOOM (+0.27%), TOP 5 MOST ACTIVE STOCKS
Ticker Company Turnover
and TEL (+0.15%).
ALI Ayala Land Inc 530,675,600
JFC Jollibee Foods Corp 378,434,300
Value turnover fell to Php8.0Bil from Php31.1Bil in the previous session. Meanwhile, BDO BDO Unibank Inc 302,771,400
foreigners remained net buyers, accumulating Php103.5Mil worth of shares. SM SM Investments Inc 285,924,100
SMPH SM Prime Hldgs Inc 261,079,400

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside of the
COL Financial website as these may be subject to tampering or unauthorized alterations.
 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 28 OCT 2020

Top Stories:

George Ching SCC: 9M20 net income trails forecast

Senior Research Manager
9M20 net income trails forecast. SCC’s 3Q20 earnings declined 71% to Php750Mil.
Semirara Mining Corp
This brought 9M20 earnings to Php3Bil, down 64% y/y, below forecasts, representing
BUY
Php25.60 63% of COL forecast and 32% of consensus forecast. The company reported that coal
production volume declined 9% during 9M20, while selling price for coal declined 20%
y/y. We will release a more detailed analysis of the 3Q20 results once the F/S is available.

Maintaining BUY rating. We have a BUY rating on SCC with a FV estimate of Php25.60/
sh. Despite the very poor earnings outlook of the company, we believe that much of the
negative news is already priced-in. The stock is the cheapest among all power companies,
trading at only 6.5X 21E P/E based on our earnings forecast. Capital appreciation is also
significant at 119% based on our fair value estimate.

Frances Rolfa Nicolas CEB: CEB divests, buy out stakes in SIAEC tieups
Research Analyst

In a disclosure to the PSE, CEB announced that it has signed a share sale and purchase
Cebu Air Inc.
HOLD agreement (SPA) with SIA Engineering Company Limited (SIAEC) for the acquisition
Php42.00 of SIAEC’s entire 51% shareholdings in Aviation Partnership (Philippines) Corporation
(APPC) for US$5.6Mil. Note that APPC is a key player in the maintenance, repair and
overhaul (MRO) business in the aviation industry, providing services to CEB and other
carriers. It is currently 51% owned by SIAEC and 49% by CEB.

Moreover, CEB disclosed that it has also signed another SPA with SIAEC to divest its 35%
shareholding in SIA Engineering (Philippines) Corporation (SIAEP) for US$7.7Mil. Note
that SIAEP is in the business of providing airframe maintenance, repair, cabin retrofits
among others for 737, A320 and A330 aircrafts. SIAEP is currently 65% owned by SIAEC
and 35% by CEB.

The acquisition and divestment mentioned are in line with CEB’s strategy to align its
line maintenance operations with its network requirements, and streamline its fleet
management to optimize operational efficiency and strengthen core competencies.
Following these, CEB will cease to have any equity interest in SIAEC, and APPC will
become a wholly-owned subsidiary of CEB.

COL Financial Group, Inc. 2

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 28 OCT 2020

Frances Rolfa Nicolas PCOR: Closure of PCOR refinery possible

Research Analyst
PCOR President and Chief Executive Officer Ramon Ang said that PCOR’s refinery would
Petron Corporation
HOLD shut down very soon if the government does not act on leveling the playing field between
Php3.10 importers and refiners in terms of taxes. Note that refiners pay value-added tax (VAT)
and excise tax, among others, when they import crude oil into the country and then pay
another round of taxes after processing and selling their products to the local market.
Meanwhile, oil importers only pay taxes when they start selling their products. Mr. Ang
also said that the closure of the refinery would mean the country could experience
shortage in oil inventory at certain times, emphasizing that a refiner’s inventory is good
for up to 90 days, compared to that of an importer which is only good for five to 10 days.
(source: Philstar)

Other News:

Research Analysts Economy: Duterte extends GCQ for Metro Manila until
November 30
John Martin Luciano, CFA
Frances Rolfa Nicolas President Rodrigo Duterte extended the implementation of the general community
Justin Richmond Cheng
quarantine (GCQ) in Metro Manila until November 30. Aside from the capital region,
Adrian Alexander Yu
the provinces of Batangas and Lanao del Sur, and the cities of Iloilo, Bacolod, Tacloban,
Kerwin Malcolm Chan
and Iligan are also under GCQ until the end of next month. The President noted that the
proposed community quarantine classifications are still subject to appeal from concerned
local government units. (Source: Inquirer)

Economy: House transmits 2021 budget bill to the Senate

The House of Representatives has transmitted its final version of the General Appropriations
Bill (GAB) to the Senate. This version contains Php4.5Tril worth of spending items for
2021’s budget. The House was able to send the bill to the Senate, one day ahead of the
Senate’s requested deadline. House Speaker Lord Allan Velasco said the 2021 budget is a
record-high budget that was designed to further strengthen the government’s response
as well as stimulate the economy amid the challenges brought about by this pandemic.
He added that the bill was specifically made to be more reflective and responsive to the
needs of the people amidst this health crisis. The Senate has confirmed the receipt of the
GAB, and said that the early transmittal would help ease the burden on them and ensure
the timely passage of the 2021 budget before Christmas. (Source: BusinessWorld)

COL Financial Group, Inc. 3

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 28 OCT 2020

Changes in Shareholdings
Date of Acquired or Price per
Stock Volume Person (Designation)
Disclosure Disposed share
20,000 4.17 Necisto Y. Sytengco, II
26-Oct SBS 40,000 A 4.19 (Vice Chairman, SVP Marketing Operations, &
2,000 4.20 Assistant Treasurer)
Alexander C. Yu
26-Oct COL 525,600 A 26.00
(Vice Chairman)
Alvin C. Go
28-Oct BDO 20,000 D 92.00 (Senior Vice President & Asst. Corporate
Secretary)
Source: PSE

COL Financial Group, Inc. 4

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 28 OCT 2020

I M P O R TA N T R AT ING DEFINITIONS
BUY
Stocks that have a BUY rating have attractive fundamentals and valuations based on our analysis. We expect the share price to outperform the market in the
next six to 12 months.

HOLD
Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive valuations 2) attractive valuations but near-term earnings outlook might
be poor or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely in line or underperform in the market in the
next six to twelve months.

SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the share price to underperform in the next six to12 months.

I M P O R TA N T DISC L AIM ER
Securities recommended, offered or sold by COL Financial Group, Inc. are subject to investment risks, including the possible loss of the principal amount invested.
Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and said information may
be incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are
subject to change without prior notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of
a security. COL Financial and/or its employees not involved in the preparation of this report may have investments in securities of derivatives of the companies
mentioned in this report and may trade them in ways different from those discussed in this report.

CO L R E S EAR C H T EAM

APRIL LYNN TAN, CFA

VP & HEAD OF RESEARCH
april.tan@colfinancial.com

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA

DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com

JOHN MARTIN LUCIANO, CFA FRANCES ROLFA NICOLAS JUSTIN RICHMOND CHENG
SENIOR RESEARCH ANALYST RESEARCH ANALYST RESEARCH ANALYST
john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com justin.cheng@colfinancial.com

ADRIAN ALEXANDER YU KERWIN MALCOLM CHAN

RESEARCH ANALYST RESEARCH ANALYST
adrian.yu@colfinancial.com kerwin.chan@colfinancial.com

C OL F INANC IAL G R O UP, IN C.

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EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
TEL NO. +632 636-5411
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WEBSITE: www.colfinancial.com

COL Financial Group, Inc. 6